Agenda Item Title:
Authorize Mayor and Finance Officer to sign the Standard Form of Agreement Between Owner and Construction Manager as Constructor (AIA Doc. A133 – 2009) and General Conditions of the Construction Contract (AIA Doc. A201-2007) with M. A. Mortenson Company for the Rushmore Plaza Civic Center Arena Project.
Origination Group:
Legal & Finance Committee
Origination Meeting Date:
10/31/2018
City Council Hearing Date:
11/05/2018
Staff Contact:
Joel Landeen, City Attorney
Agenda Item Summary:
The attached documents are the final agreements to secure Mortenson’s services as the Construction Manager at Risk (CMR) for the Rushmore Plaza Civic Center arena project. Mortenson was selected through a competitive process and is partnered with Scull Construction. Mortenson has extensive experience in building arenas and other similar large scale projects such as U.S. Bank Stadium, Pinnacle Bank Arena in Lincoln, the Milwaukee Bucks new arena, the Golden State Warriors new arena in San Francisco, and the new NFL stadium in Las Vegas. The agreement and general conditions for construction are based on the standard form agreement prepared by the American Institute of Architects. In addition to input from the City staff and the City Legal Department, the City had input into the contract terms from Tegra, the City’s owners representative, and an attorney from Faegre Baker Daniels LLP. While Mortenson’s primary role will be to construct the arena, as a CMR it is also fully involved in the design of the project. The costs for the designs are being done by Mortenson to insure that the design will be within budget. Mortenson is also providing input to the design team to minimize potential construction problems that may not otherwise have been considered in the design phase. At the end of the design phase, Mortenson will present the City with a guaranteed maximum price for the arena. At that point, the City will know exactly what it is getting and what the cost will be. If the City is unhappy with the building we will be able to construct for the GMP the City can decide to walk away from the project and void the agreement. If the City notifies the CMR to proceed, Mortenson’s fee for the construction phase will be converted to a fixed amount based on the GMP. There are several exhibits referenced in the agreement that will not be finalized until after the determination of the GMP and prior to the decision to proceed with construction.
Funding Source & Fiscal Impact (if applicable):
| Funding | Cost Center |
|---|---|
| The contract is divided into three parts. Mortenson received $48,000 for its preconstruction services preparing construction estimates and working with the architects on projected costs. The contract agrees to pay Mortenson $582,000 for the design & pre-construction phase of the project. At the end of the design & pre-construction phase the City will be presented with the GMP. If the City authorizes the project to proceed, Mortenson’s fee will be 3.15% of the GMP. Based on an estimated construction cost of $105 million, the fee would be approximately $3.3 million. The funding source for this contract is the Vision Account. | |
Recommendations:
Origination Recommendation Action:
Approve
Origination Recommendation Notes:
See below.
City Council Options:
If you approve the agreement, the project will remain on schedule. If you reject the agreement work on the project may cease and we would either need to start over or approve the agreement at a later date which will most likely delay the project.